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Enterprise
Agility—What Is It and What Fuels It? "The current economic and competitive climate has focused organizations' minds on the need to become more agile, with 84% of UK organizations regarding business agility as vital to their future success." So says The Age of Agility, a Gartner UK cross-industry 2002 study commissioned by BT Group, nee British Telecommunications. In the utility sector: "The industry estimates that becoming more agile could contribute up to 9% of revenues by 2005...80% of respondents regarded agility as an important priority for their customer service and support functions [80% for IT as well], whilst 70% see agility as important for sales and marketing." Sixty percent responded that agility in operations was a priority. "90% regard the benefits of becoming more agile as primarily creating more valuable customer interactions. 70% see the benefits in terms of more effective internal and external processes." As to where agility would provide substantial contributions, 80% said Customer Service, and 50% said Security, Knowledge Management, Asset Management, and Cost Efficiency. Welcome
to the 21st century. This new environment of surprise and change is not
going to blow over and settle down. The accelerating pace of new
technology is a prime driver on the surface, but behind that are the
accelerating paces of new knowledge development and new stake-holder
expectations, and the tighter coupling and complexity of an interconnected
economic community. Agility,
like any business priority that gains strategic importance, creates demand
for enabling products and services. The information technology sector is
usually the first to respond, for it is the core of both enterprise
infrastructure and business process implementation and management. This
vendor-rush to establish proprietary beachheads typically results in a
variety of disparate interpretations and a techno-centric solution focus.
These are valuable and natural developments, but they are not sufficient.
Solutions do not deliver real value if they are not fit to the true nature
of the need—and the need for agility is highly organization and
situation specific. The
first essay
looking at Enterprise Agility skimmed some agility-enabling requirements.
In this second of the series, we overview the total set of requirements,
and explore one of them in more depth: knowledge management for visibility
and awareness. Being agile enough to respond is of little value if events
that require response are sensed and understood too late. The other
requirements will be explored in future essays. To put things in context, enterprise agility has three core enabling elements: 1) accurate timely awareness that a change should be made, enabled by focused knowledge management processes, 2) effective value-propositioning skills to prioritize among competing changes and competing response-alternatives to those changes, and 3) a facilitated ability to change business processes and to customize operational responses in real time, which we call response ability. Response
Ability—The
ability to change effectively, or rather its lack, tends to be the pain
felt initially that creates a call for more agility. Maybe it's a project
that overruns cost, takes much to long, fails to meet performance
expectations, or simply wasn't approved because it can't be integrated
into the current legacy environment. Perhaps it's an unexpected
operational situation that overwhelms resources and capabilities. Possibly
it's regulatory or compliance requirements that can't be accommodated
quick enough or affordably. Maybe it's rising risk or vulnerability that
can't be mitigated responsibly, or an ugly merger/acquisition integration.
Generally it is the inability to develop, support or change a business
process effectively. Whatever, it is usually the sense of failure in the
face of a needed or desired change that illuminates the need. This
realization generally focuses an organization on the factors that inhibit
change—the lack of response ability. The enabling requirements
for response ability have been shown to be rooted in both culture, and in
the underlying structure of processes and procedures—subjects for future
exploration here. Value
Propositioning Skills—Timely
corporate response, when a change is indicated, doesn't happen without a
timely decision. But a fast decision is not necessarily a good
decision—a crucial area overlooked in earlier agility research. A
company that has developed good response ability has alternatives,
which require intelligent choice-making based on insightful problem
definitions and sound value propositioning skills—both on the part of
decision makers and on the part of decision champions. Maybe it's a choice
among new software solutions that have conflicting champions. Maybe it's a
choice among alternate responses to new risks or security threats. Perhaps
it's a choice between what to outsource and with whom, between different
pricing initiatives, between different new services to offer, or between
real-time operational response priorities. Decisions are much easier when
there are few or no choices. Herbert Simon's Nobel Prize winning work
identified satisficing as a pervasive human psychological force
which accepts the first alternative that satisfies stated
requirements—explaining, but not excusing, why the best solutions are
often not considered. Recent work on the human behavioral nature of
decision making points the way to better problem understandings, better
value assessment, and better decisions. We'll look in depth at the skills
of value propositioning at a later time. Knowledge
Management—an
overused term with broad interpretation, but with real meaning for the
agile enterprise. Knowledge about external and internal events and status
that call for attentive response is the fuel of agility. Its lack is an
ever present observation of hindsight; but if the ability to respond
exists, it becomes a glaring pain. Maybe it's inaccurate network-asset
knowledge that inhibits timely service restoration. Perhaps it's
mismatched supply-demand realities that impact service quality. Possibly
it's lack of operational or corporate transparency that runs afoul of
Sarbanes-Oxley. Maybe it's lack of knowledge about new security threats
and vulnerabilities, or a lack of knowledge about who needs newly
available information or who needs obsolete knowledge corrected. In all
cases, not knowing things that should be known is frustrating to managers,
and met with decreasing tolerance by both stakeholders and law. Where
Should an Organization Start? The
progression of operational response activity is generally from: (1)
awareness that response is indicated, to (2) evaluating and deciding upon
the best action to take, to (3) implementing the response. Yet the
progression of competency development is generally the reverse. Though
this may seem backward, it is a natural course in typical reactively
driven business environments. An inability to affect a management-demanded
change first stubs its toe on intractable processes and infrastructure.
Once these are made response able, it becomes evident that
successful responses were not-often-enough the best responses to
make—then the processes of decision making and value assessment come
under scrutiny. When these are honed, it then becomes evident that the
awareness of decision-triggering events is inadequate. Working
backwards through these three steps removes roadblocks that provide
immediate, though attenuated, value at each step. Whereas working forward
cannot provide value until all three are in balance. However, these
statements are only true when looking at total-enterprise agility. When a
specific department or process is the focus, it may well be that the lack
of timely information is the roadblock, rather than effective decisiveness
or response implementation. There is ample evidence that incremental
successes in process reengineering, working one area at a time, is a much
surer way to corporate-wide success. For one, the incremental process
provides proof of values and methods to other areas with high resistance
and inertia. For another, it can attack high-payoff, fast result, low cost
areas to build momentum and convert skeptics. Importantly, it narrows the
focus to a few variables rather than the complexity and variability of
corporate-wide infrastructures and processes. Content,
Accuracy, Timeliness and Relevance
When
knowledge management focuses on awareness it deals with distinctions
between data, information and knowledge. Monitoring external and internal
events and status produces data, and lots of it. That data becomes
information when it is filtered for relevancy, timeliness, accuracy and
content. But no action takes place on that information until it becomes
meaningful knowledge, a very personal thing that resides in heads, not in
data bases. Good awareness demands good sensors in both external and
internal environments. With all this sensor data, effective awareness must
have processes for selecting and transforming data into information,
providing that information to the right people, and helping them turn it
into actionable knowledge. Data
has four distinct qualities. Accuracy and Timeliness can be
facilitated, or even accomplished, with technologies and outside services.
Relevancy requires thoughtful human intervention—for it needs an
assessment that action is required. Content is a blend—for only a
human can determine if everything needed for intelligent action is
present, and what is needed to augment sensor data to complete the
data-to-information process. These four qualities, by the way, are core
concepts embedded in current U.S. Defense Department modernization
strategies for warfighting—where real-time information superiority is
the new focus (reference at the end). Content
—Data has to be
complete before it can be turned into useful information. Data coming in
from a live feed of external events can indicate that a response is
probably necessary, but these events may need correlation with other
events, as well as with internal status, before proper action can be
determined. Complete internal data can also be a problem: Gail and Henry
Kucera write in GeoWorld of a new technology initiative to plug a
hole in an organization's geospacial information: "Imagine ... a
spatial dataset that describes something of great importance to your
business. When you .. demonstrate how nicely you can scroll, zoom and
query the displayed data, your boss tells you that part of the area has
changed, and your dataset already is out of date. Then he asks if you can
show him how it looked back when a certain event took place or predict how
it might look next year, which you can't do... To ignore spatial change is
to leave an entire dimension of information and its effects unrevealed and
unconsidered." They go on to say that the National Technology
Alliance (NTA) is starting a project to develop commercial technology with
this time-travel-through-data capability (reference at end). Accuracy—Technology
can provide accurate data for decision support, but only if accuracy is
made a project requirement. Tom Petrik writes about an Outage Management
project at a mid-sized utility in Electric Light and Power (April
2001): "Only one problem: the system wasn't performing ... during the
deployment process, everyone was so intent on getting the new system on
line that they failed to give full consideration to data-quality
requirements ... Now bad data is being pumped to the outage system like
bad gasoline ... I estimate that 85 percent of system deployment failures
are caused not by technical problems but by bad data." Timeliness—Technology
offers good solutions for timely internal data visibility in many
varieties and buzz words: Enterprise Performance Management (IBM),
Corporate Performance Management (Gartner), Dashboards (data display
technology), Real-Time Enterprise (sense-and-respond architecture), and so
forth. The focus is on visibility of real-time operational-status—with
general technologies for cross-industry application. One company with a
unique approach has a very utility-specific and interesting twist on
timeliness: 4DataLink's technology "enables (1) real-time visibility
of all asset relationships and their status, (2) enterprise-wide views
emphasizing different user needs like geographic, demographic, logical or
evolutionary information; and (3) perfect recall of all past history
and evolution (reference at the end)." The NTA project mentioned
above seems to be reinventing something that already exists—indicating
their own need for better knowledge management. Relevance—This
is the crucial issue in the end. Technology has given us all a bad case of
information overload. C.D. Hobbs observes in Utility Automation &
Engineering T&D (March, 1999): "The technologist plays a
critical role in ... designing the applications and technical architecture
that forms the IT foundation for doing business. Adaptability and agility
in reconfiguring these architectures is crucial to rapid anything—but
particularly rapid response to new information requirements ... But let's
not forget that this begins by a clear request for information required to
execute business strategy, and this request will never come from the
technologist. Specifying the information requirements to execute strategy
lies solely in the province of the business leaders. Developing, or
acquiring, this talent among the leaders of the emerging energy business
segments will be a critical differentiator of successful CEOs and their
energy businesses...." In
The End... Agility
is a strategic objective that must co-exist in harmony and synergy with an
organization's other strategic objectives, priorities, and capabilities,
whether at the enterprise level or the departmental level. It is enabled
by infrastructure, business processes, and strategic policy; but in the
end, it is limited by the visceral knowledge and values of change
proficiency held by all involved. Agility can't be bought in a box—it
must be actively practiced as a mind set. And to be effective, it must be
fit to the specifics of the organizational needs and realities. According
to Gartner's The Age of Agility: "80% of executives in the
Utilities industry believe that becoming agile will require whole-hearted
organizational transformation." Whole-minded at least, but not as
hard as it sounds. Proven methods supporting an organization's current
priorities and resource commitments, while simultaneously advancing the
transformation to agility, will be explored here in the future. ------------- References and sources for more information -----------------------
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©2004 RKDove
- Attributed Copies Permitted - Essay #65 -
First Published as Utility Agility - What Is It and What Fuels It? Part 2, IssueAlert® |
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